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October 28, 2008

Here are the Web's best new links about compliance and cost aspects of plan operation, design and policy.

Today's sponsor is Employee Benefits Institute of America (EBIA)

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EBIA Adds a One-Two Punch to Your Employee Benefits Library!

Our Cafeteria Plans manual is the nation’s #1 resource for cafeteria plan sponsors and administrators. The Cafeteria Plans manual provides detailed coverage of all legal requirements for cafeteria plans, health FSAs, and DCAPs. Our Consumer-Driven Health Care manual is the country's best HSA and HRA Guidebook. With both manuals, subscribers get EBIA's top-notch analysis, copies of critical source documents, examples, administration tips, and sample documents. For more information, visit our manuals page.

[Official Guidance] IRS Cancels Oct. 30 Hearing on Employer Comparable Contributions to HSAs; Nobody Asks to Speak
Excerpt: "This document cancels a public hearing on proposed rulemaking providing guidance on employer comparable contributions to Health Savings Accounts (HSAs) under section 4980G of the Internal Revenue Code as amended by sections 302, 305, and 306 of the Tax Relief and Health Care Act of 2006. The proposed regulations also provide guidance relating to the requirement of a return to accompany payment of the excise tax under section 4980B, 4980D, 4980E or 4980G of the Code and the time for filing that return." (Internal Revenue Service)

[Guidance Overview] Final Regulations on Hospital Lengths of Stay for Newborns and Mothers
Excerpt: "EBIA Comment: The hospital length of stay requirements for newborns and mothers generally apply to ERISA group health plans, group health plans of state and local governmental employers, and church group health plans. However, there are exceptions. For example, fully insured plans are not subject to these requirements if their insurance coverage is subject to state insurance laws that meet specific criteria; neither are self-funded nonfederal governmental plans that have opted out of the requirements in accordance with specific procedures." (Employee Benefits Institute of America)

[Guidance Overview] The OPEB Challenge: Mapping a Comprehensive Strategy for Public Employers
44 pages. Excerpt: "Our purpose in this paper was to introduce you to the core issues of OPEB program finance, including the accounting considerations presented by GASB 45. In our discussion, we have focused on the four key elements in the OPEB decision process: valuation, funding, investment strategy, and benefit design. At each step in the process, we have emphasized three themes that cut across each decision element: A thorough understanding of the numbers is critical. OPEB finance is different from pension finance. Decisions with respect to any one element -- e.g., valuation methodology, the decision to fund, investment strategy or design -- will affect all the others." (JPMorgan Chase & Co. and National Conference on Public Employee Retirement Systems)

San Francisco Restaurant Group Asks for 9th Circuit Rehearing
Excerpt: "The Golden Gate Restaurant Association has asked all of the judges on the 9th U.S. Circuit Court of Appeals to rehear a ruling issued last month approving a San Francisco law mandating workplace health coverage." (; free registration required)

New Law Helps Sick Students Keep Health Coverage
Excerpt: "President Bush signed 'Michelle's Law' on Oct. 9. Under the new law, health plans must allow college students who take a leave of absence or reduce their class load because of illness to retain their dependent status under their parents' health plan for up to one year. The act takes effect for medically necessary leaves of absence that begin in plan years beginning on or after Oct. 9, 2009 (Jan. 1, 2010, for calendar-year plans)." (Watson Wyatt Worldwide)

Adoption Act Amends Tax Code Definition of Qualifying Child
Excerpt: "On Oct. 7, President Bush signed the Fostering Connections to Success and Increasing Adoptions Act of 2008 (H.R.6893). The act focuses primarily on promoting adoption, but it also amends the definition of a qualifying child in the Internal Revenue Code. The definition is used to determine eligibility for certain tax benefits, such as the dependency exemption, the child tax credit, the earned income tax credit and the dependent care tax credit. In addition, it is referenced by many employer-sponsored health care and dependent care plans." (Watson Wyatt Worldwide)

Massachusetts Health Reform: A Public Perspective from Debate Through Implementation
Excerpt: "This study examines public opinion about the new health reform law in Massachusetts at four stages, from the beginning of the debate in September 2003 through June 2008, two years into implementation." (Health Affairs)

Employees' Views at the End of One Year of Health Reform in Massachusetts
Excerpt: "Based on surveys of working-age adults ages 18-64 in Massachusetts in 2006 and 2007, this paper examines employers' responses to health reform as reported by their employees. Results suggest that at roughly the end of the first year under health reform, employers in Massachusetts had made few changes in the insurance coverage they offered to their workers." (Health Affairs)

After the Mandates: Massachusetts Employers Continue to Support Health Reform As More Firms Offer Coverage
Excerpt: "Based on a spring 2008 survey of 1,003 randomly selected Massachusetts firms, this paper examines views and responses of employers to health care reform after employer and individual mandates went into effect. A majority of firms view reform as 'good for Massachusetts.' The percentage of firms with three or more workers offering coverage increased from 73 percent to 79 percent. Massachusetts employers are less likely than employers nationally to indicate plans to terminate coverage or restrict eligibility for health benefits, which suggests that crowd-out is not occurring." (Health Affairs)

Diabetes Drug Costs Soaring, Topping $12B Last Year
Excerpt: "Americans with diabetes nearly doubled their spending on drugs for the disease in just six years, with the bill last year climbing to an eye-popping $12.5 billion. Newer, more costly drugs are driving the increase, said researchers, despite a lack of strong evidence for the new drugs' greater benefits and safety. And there are more people being treated for diabetes. The new study follows updated treatment advice for Type 2 diabetes, issued last week. In those recommendations, an expert panel told doctors to use older, cheaper drugs first." (AP via The Houston Chronicle)

New 'Medical Home' Model Has Proponents Excited That Improved Primary Care Will Lead to Cost Savings in the Future
Excerpt: "Employers desperate to reduce health care costs are embracing a new strategy: Pay doctors more. Tired of filling the gaps in a fragmented health care system with their own piecemeal solutions, employers such as IBM, Boeing, Hannaford Bros. and others say they are willing to pay primary care doctors more if doctors spend more time managing and coordinating the health care of their patients." (Workforce Management; free registration required)

McCain Health Plan Calls for Shopping Around
Excerpt: "John McCain's health plan would bring about a dramatic shift in how millions of people get health insurance coverage. He would let people shop around for plans offered by insurers in other states. New Yorkers could look to Alabama, for example, or any other state when shopping for coverage. 'Why not? Don't we go across state lines when we purchase other things in America?' McCain asks. The idea sounds simple, but has huge implications." (AP via Yahoo! News)

Health Insurers Reinvent Themselves As Money Managers
Excerpt: "Many rush to open banks as more Americans open health savings accounts, a tax-sheltered way to pay medical bills. Managing that money is more profitable than offering health insurance." (Los Angeles Times)

[Opinion] Obama Advisers on Health Care - They Once Liked McCain's Principles
Excerpt: "'The fact that the tax subsidy, which supports the employer-sponsored system, is better than nothing is a feeble excuse for resisting any changes to the status quo.' That's not John McCain's judgment. It's a quote from Jason Furman, who happens to be Mr. Obama's economic policy director. In a cri de coeur published in the journal Democracy in 2006, Mr. Furman implored fellow Democrats and other progressives to confront 'a critical missing link' in their health ideology -- the same link his boss now spends most of his time demagoguing." (The Wall Street Journal)

[Opinion] Arizonans May Enact Measure That Could Shape the Health Care Debate
Excerpt: "Proposition 101, the Freedom of Choice in Health Care Act, would put the following language into Arizona's Constitution: 'Because all people should have the right to make decisions about their health care, no law shall be passed that restricts a person's freedom of choice of private health care systems or private plans of any type. No law shall interfere with a person's or entity's right to pay directly for lawful medical services, nor shall any law impose a penalty or fine, of any type, for choosing to obtain or decline health care coverage or for participation in any particular health care system or plan.'" (George F. Will via The Washington Post; free registration required)

[Opinion] The Candidates' Health Plans
Excerpt: "Both candidates have largely accepted the prevailing expert wisdom on ways to improve quality and lower health care costs over the long run, such as relying more on electronic medical records and better management of the chronically ill. But they have very different ideas on the best way to make insurance available and affordable for all Americans." (The New York Times; free registration required)

Sponsored by: ALM

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Complete Benefits Law Guidance from Law Journal Press

The nation's workforce and health care system are constantly evolving and so are the legal issues. Law Journal Press helps you handle any benefits law question with up-to-date, authoritative books on all aspects of the field. Get legal and practical advice from leading experts on everything from COBRA to ERISA, "contingent" employees to family and medical leave, and more. Browse our product listings for detailed information and special offers.

(Please visit our sponsors. We try to make sure their products and services will be of interest to you. Thanks! --Editor)

Links to Items on Executive Comp, Benefits in General

[Guidance Overview] New Transit Benefit for Bicyclists
Excerpt: "Congress recently passed and President Bush signed the Emergency Economic Stabilization Act (EESA).1 Section 211 of the EESA amends Section 132 of the Internal Revenue Code (IRC) to create a new tax-preferred transit benefit for bicyclists. Effective January 1, 2009, private and public sector employers may provide tax-free subsidies to employees who regularly bike to work." (The Segal Group, Inc.)

[Guidance Overview] Arbitrability of USERRA Claims: Battle on the Home Front
Excerpt: "With the continuation of major troop deployments overseas, increasing numbers of employers and employees are finding themselves affected by the protections of the Uniformed Services Employment and Reemployment Rights Act of 1994 ('USERRA'), which provides comprehensive re-employment and anti-discrimination rights to employees who serve in America's military. . . . Employees who seek to vindicate their rights under USERRA, however, are finding themselves at the center of a conflict among federal courts concerning whether USERRA claims may be subject to their employers' mandatory arbitration clauses." (

[Guidance Overview] ERISA Does Not Prohibit Proposed Transfer of Assets from Terminated MEWA to Tax-Exempt Foundation
Excerpt: "EBIA Comment: We found this advisory opinion noteworthy because it addresses issues relating to the distribution of welfare plan assets on plan termination. But given how little guidance exists on this topic, it is unfortunate that the DOL did not explain its reasoning more clearly. The opinion appears to conclude that the proposed transfer was permissible because the trust had been properly terminated and all liabilities satisfied." (Employee Benefits Institute of America)

[Guidance Overview] The ERISA and Non-ERISA Employee Benefit Implications of the Emergency Economic Stabilization Act of 2008
Excerpt: "Employers should consult with benefits counsel to decide whether any of the benefit-related provisions contained in EESA are applicable to their benefits programs." (Aiken & Aiken)

[Guidance Overview] Compliance with Final Regulations under Code Section 409A Required by December 31, 2008
Excerpt: "If not yet started or completed, the following should be undertaken immediately: (1) identify and inventory all agreements, methods, programs, or arrangements that could include a 'nonqualified deferred compensation plan' and (2) work with counsel to take such action as may be warranted to comply with the written document and other requirements of Section 409A prior to January 1, 2009." (Blank Rome LLP)

IRS to Waive Code Y 2008 Reporting Mandate
Excerpt: "Treasury Deputy Benefits Tax Counsel Helen H. Morrison told attendees at a recent Webinar that the Internal Revenue Service (IRS) will waive the requirements for Code Y reporting in 2008 of amounts deferred under 409A for nonqualified deferred compensation plans (NQDC)." (; free registration required)

Lessons from the Orth Case
Excerpt: "There are some really great lessons for all from the District Court and the Circuit Court opinions in the Orth v. Wisconsin State Employees Union Council 24, et al. case discussed in this previous post here (in case you missed it): (1) Statements in collective bargaining agreements can give rise to unintended ERISA plans. The district court opinion includes a discussion of this issue . . . ." (Attorney B. Janell Grenier via

Expatriate Benefits Improve as Assignments Double
Excerpt: "Mercer's 2008/2009 Benefits Survey for Expatriates and Globally Mobile Employees indicates 86% of companies consider benefit provision for expatriate employees a medium or high business priority." (; free registration required)

Newly Posted Events
(Post Yours!)

Administrative Problems in Section 125 Plans (60-Minute Power Series Webcast)
Nationwide on November 11, 2008
presented by International Foundation of Employee Benefit Plans

Aon Consulting’s 2008 Replacement Ratio Study™
in Colorado on November 11, 2008
presented by Western Pension and Benefits Conference-Denver Chapter

Year-End Compliance Checklist (60-Minute Power Series Webcast)
Nationwide on November 18, 2008
presented by International Foundation of Employee Benefit Plans

Newly Posted Press Releases
(Post Yours!)

Basic Competencies for Health Information Management and Informatics Workforce Development
American Medical Informatics Association

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Plan Document Specialist
for American National Insurance Company
in TX

DC / 401(k) Compliance Consultant
for The Savitz Organization
in DE, NJ, PA

Senior Associate - Actuarial
for Fidelity Investments
in MA

Retirement Plan Services Administrator
for Stock Yards Bank and Trust
in KY

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